The Development of the Swedish Game Industry - The Video Game Industry: Formation, Present State, and Future - page 129

recently created a couple of apps for Apple iOS, for example, the iPad game
Shot Shot Shoot .
Other famous developers like Jonatan Söderström (aka Cactus) and
Nicklas Nygren (aka Nil as) have chosen to go outside the traditional
industry patterns and release many of their games as free downloads. The
result of this is no direct capital income from these games; it instead leads
to quite a build-up of cultural capital, with fame and a huge following.
They fi nance the development by taking other jobs or by utilizing the Swed-
ish welfare state, for example, by taking the general available government
university student grants and loans.
Although new companies have been introduced the last couple of years,
there has been some turbulence within the industry. The fi nancial crisis in
2008 hit the game industry hard, and the situation in Sweden was similar
to the dot-com bubble burst, but without the structural problems. The eco-
nomic results in the Swedish industry were not as alarming; the return on
equity ( Figure 7.1) was 0 per cent in 2007, but far from the extremely low
levels of the period 1997-2003. The economic fundamentals were better, but
again, some of the major players disappeared or reduced the workforce.
The most spectacular bankruptcy was the fall of Grin in 2009. Grin was
one of the companies that had turned a good profi t and was, in 2008, the
second largest developer in Sweden. Grin had even expanded abroad, and
with 140 employees in Sweden, the company had almost 10 per cent of the
total industry workforce. Consequently, the bankruptcy had a profound
ef ect on the structure of the industry. The company was founded in 2000
and had developed a game engine used for the PC adaptations of Ghost
Recon . Grin was one of the fi rst Swedish companies that got a contract
with a Japanese publisher. Grin developed the new games in the Bionic
Commando series for Japanese publisher Capcom. Grin encountered prob-
lems in 2008. The company had a new contract with Square Enix, one of
the other major Japanese publishers, to develop a new Final Fantasy game.
Grin had expected a large payment that was contested and ultimately not
paid, and the company was in rapid succession forced into bankruptcy. In
the aftermath of the Grin bankruptcy a large number of new companies
were established by former employees (Ottsjö 2011).
Avalanche Studios, the creators of the Just Cause games, was also hit
when the company lost a contract when publishers became more restrictive
with game contracts after the fi nancial crisis. Avalanche did not go broke
but had to let people go and a planned expansion had to be put on ice.
THE COMPANY STRUCTURE AND
NEW INDUSTRY ORGANIZATION
There are a few large companies within the Swedish industry. These com-
panies expanded rapidly, from only a few employees and a loose structure